Question

If abc. records its beginning inventory and purchases, but include some items twice (double count the same items) in ending inventory, what is the effect on the financial statements?

Answer 1

If abc. records its beginning inventory and purchases, but includes some items twice in ending inventory, it will have an overstatement of its inventory balance. This will result in an overstatement of assets and an overstatement of net income on the financial statements.

Step-by-step explanation:

If abc. records its beginning inventory and purchases, but includes some items twice in ending inventory, it will have an overstatement of its inventory balance. This will result in an overstatement of assets and an overstatement of net income on the financial statements.